Digital Infrastructure: How to Build and Finance Projects Legally

A digital infrastructure project must obtain all applicable land use entitlements before construction begins, including zoning permits, conditional use approvals, and easements and rights-of-way across private and public land, and a project that fails to secure these approvals risks stop-work orders, costly redesigns, and litigation from adjacent landowners.

Land use and zoning and municipal law counsel can advise on the specific zoning, land use, and easement requirements and develop the land use entitlement and easement acquisition strategy.

A digital infrastructure project constituting a major federal action must complete either an environmental assessment or an environmental impact statement under NEPA before the relevant federal agency can approve any federal permit or loan, and the NEPA review process can add months or years to the project timeline while parallel state-level environmental review requirements must also be identified early.

Land use and real estate and construction contracts counsel can advise on the specific digital infrastructure legal framework and develop the infrastructure development and permitting strategy.

Energy and environmental law and environmental compliance counsel can advise on the specific NEPA and environmental permitting requirements and develop the environmental compliance and permitting strategy.

The Telecommunications Act of 1996 limits the authority of state and local governments to regulate wireless telecommunications facilities, and a local government that denies a tower permit without a written decision based on substantial evidence is subject to challenge in federal court, while digital infrastructure projects requiring a large grid connection must navigate interconnection queue rules where queue positions can extend the development timeline by several years.

Telecommunications and energy regulatory counsel can advise on the specific telecommunications, grid connection, and spectrum licensing obligations and develop the regulatory compliance strategy.

Data sovereignty laws require that certain categories of data be stored, processed, or accessed only within the borders of the jurisdiction that enacted the law, and an operator routing such data through servers outside the relevant jurisdiction may violate the law even without a physical presence there, while the EU Data Act and GDPR impose additional obligations regarding data portability and conditions under which cloud providers can transfer data to third-country governments.

Global data compliance and cross-border data protection counsel can advise on the specific data sovereignty and cross-border data flow obligations and develop the data sovereignty compliance strategy.

A project finance structure requires the developer to demonstrate that the project's revenue stream is sufficiently certain to support debt service through bankable offtake agreements, completion guarantees, and insurance arrangements, and a public-private partnership requires careful negotiation of the concession agreement to ensure the private developer retains performance incentives while the public sponsor retains control over the public interest aspects.

Public-private partnerships (PPP) and project development and finance counsel can advise on the specific project finance and PPP structure risks and develop the project finance structuring and risk allocation strategy.

Digital infrastructure projects face sustainability obligations imposed by both regulators and institutional investors, including requirements to demonstrate that the project's energy consumption will be met from renewable sources and that its carbon footprint will be measured and disclosed, and an operator failing to meet applicable environmental standards faces both regulatory enforcement and civil liability.

ESG compliance and sustainability counsel can advise on the specific sustainability and environmental liability risks and develop the ESG compliance and sustainability risk management strategy.

A construction contract for a digital infrastructure project must allocate the risks of permitting delays, supply chain disruptions, and unforeseen site conditions between the developer and the contractor, and a developer encountering a permitting dispute can challenge the agency's decision through administrative appeals and federal court litigation under the Telecommunications Act's specific remedies.

Foreign direct investment (FDI) and semiconductor counsel can advise on the specific contract structuring and permitting dispute requirements and develop the infrastructure contract structuring and permitting dispute resolution strategy.

A digital infrastructure project requiring CHIPS and Science Act incentives or other federal grants must comply with the specific conditions attached to those grants, including domestic content requirements and restrictions on using federal funds for certain infrastructure categories, and a lender or investor financing such a project must assess regulatory change risk associated with possible changes in data sovereignty laws, environmental regulations, or telecommunications rules.

Cloud computing and data governance accountability counsel can advise on the specific infrastructure financing and regulatory change risk issues and develop the infrastructure financing and regulatory risk management strategy.